Election of PNG Prime Minister

By: PNG Political Commentary FB Page

There has been a lot of confusion and also a lack of understanding in regards to the election of the PNG Prime Minister. Therefore I’m here to give an explanation on the election of the Prime Minister to clear the polluted air. And that’s right the Prime Minister is elected! Not appointed! That’s one thing you all have to understand. Who elects the Prime Minister? All 111 members of Parliament take part in the election of the Prime Minister.

Now let’s get down to basics. First of all it is the law that regulates or outlines the Prime Minister’s election process. The PNG Constitution, Organic Law on the Integrity of Political Parties (OLIPP), and the Parliamentary Standing Orders (PSO) are important laws to take note of.

 

Invitation to Form Government

• It all starts with an “Invitation to Form Government” (Section 63(1) OLIPP). Under this particular provision the Electoral Commission, on the date of the return of the writs, is mandatorily obliged to advise the Head of Stead (Governor General) of the political party which has endorsed the greatest number of candidates declared elected.

• After receiving the advice from Electoral Commission, the Governor General then, in accordance with the advice of the Electoral Commission, invites that particular political party to form government.

• Note that the Governor General cannot act on his own accord but only on the advice of the Electoral Commission. Also the Governor General is not at this point appointing a political party to form government but rather inviting it to form Government. Like for instance, someone sends you an invitation to go to a birthday Party. If you receive the invitation it doesn’t mean you’re already at the party, you may go or you may not go.

At this time according to the latest reports, it is evident that People’s National Congress Party (PNC) has the greatest numbers of candidates that have been duly declared as elected in 2017. Therefore there’s no doubt that PNC would be invited by the Governor General to form Government.

parliament

Election of Prime Minister under PSO section 7

This is the stage where things become technical but I’ll try to be as layman as possible.

• The Prime Minister is elected by members of Parliament normally during Parliament’s second meeting. The first Parliament meeting is convened after the due date of the return of the writs and is usually for swearing in of members, the election of the Speaker, and other official business (s142(3) PNG Constitution, see also case of Haiveta v Wingti & others [1994] PNGLR 197) .

• By virtue of section 63(4) of the OLIPP and section 7 of the PSO, the political party that has received the invitation to form government from the Governor General has the privilege of nominating a member of parliament to become Prime Minister. Parliament would then vote after the nomination and the nominated candidate would have to muster a simple majority in order to be elected and declared Prime Minister.

• If the candidate nominated by the invited political party does not receive a simple majority than Parliament would have to resort to section 7A of the PSO for the election of a Prime Minister.

• Take note that the procedure under section 7A of the PSO is only followed if the candidate nominated by the invited political party fails to secure a simple majority of votes to become the elected and declared Prime Minister.

• Simple majority should be around 50% of the total members of parliament. So 50% x 111= 55.5 round it up you get 56.

Election of Prime Minister under Section 7A PSO

• The Speaker of Parliament calls for nominations.

• At this stage the floor is open to all members of Parliament to make nominations.

• Under this process the privilege of nominating a candidate
for the Prime Minister’s seat is not only given to the party invited to form government but also other political parties.

• Members of Parliament can nominate more than one candidate for the Prime Minister’s seat under this process.

• A preferred nominated candidate for Prime Minister does not need to reach a simple majority of votes from members of parliament. The preferred nominated candidate only needs to receive a majority of votes in order for him to be declared as the duly elected Prime Minister (PSO section 7A(11) ).

If PNC and its coalition partners increases to 56 or more, most likely we’ll see PNC’s Party Leader retain his seat as Prime Minister and the formation of a PNC coalition government. On the other hand if the Eastern Alliance Camp increases we might see a change of government. Remember this is Papua New Guinea, so expect the unexpected…

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Immediate Priorities to Prepare for 2017 Elections 

By: Solomon Kantha 
Recommended to Electoral Commissioner in 2015

IMMEDIATE PRIORITIES TO PREPARE FOR 2017 ELECTIONS 

 

a) Improvement of Electoral Roll 
The electoral roll will be the key priority and will obviously require a proper, thorough and effective updating. The Electoral Commission will need to work closely with political parties, candidates, elected leaders, civil society and voters to get the buy-in to ensure a clean and updated electoral roll. It has to do more than just administering elections. Roll management needs to be configured so that any re-enrolment, updating and verification is conducted with centralized oversight, auditing and controls. More importantly, a dedicated roll management unit within the Electoral Commission headquarters must be set up and supported by the government as a specific program. There would also need to be transparent recruitment and performance management and regular auditing of province, district, and ward-based level staff.

 

Reasonably low-cost technology can compile (in the field) a digital Voters’ Roll that includes both photograph and fingerprints. Consideration will be given to requesting this technology and to trialling it in priority areas.  

 

b) Introduction of Voter Identification Card 
A voter ID card must be implemented for the 2017 elections and is the single most important device that can transform the election in the polling process by eliminating double/multiple voting, voting using ghost names, under-aged voting, impersonation and other aspects of electoral fraud. A basic voter ID card can be introduced with a photograph and finger print basic security feature and issued to every eligible registered voter. I have observed the use of a voter ID card in elections in other countries in the region and it has tremendously facilitated a successful election. The voter ID will have the basic particulars of a person such as an ID number, full name, sex, date of birth, province, district, electorate/constituency, and village. The voter will therefore vote in the electorate that appears on his/her voter ID. Apart from its use once every five years, the ID card can also serve the purpose of other identification for ordinary citizens to access banking, travel, pension, business and other services. The voter ID card will be reissued only if the person changes electorate or changes name in the case of a married female voter.  

 

A Voter ID Unit will be established to work on the voter ID card system and kick start the process for 2017 elections. A bid process can be advertised with the contract awarded to a consultant company to set up the IT infrastructure for the Electoral Commission to administer, register and process all voter ID cards. The process of the production of voter ID cards will be owned by the Electoral Commission. Once an eligible voter is registered the particulars of the individual will be automatically transmitted to the central system in the headquarters to process the person’s voter ID card.  

 

c) Improvement of Polling Process 
The polling process can be improved with the use of a voter ID card. An eligible voter will be required to produce their voter ID card to a polling official before casting their vote. In the event that a person presents their voter ID card but their name is not on the electoral roll, the person can still vote given the validity, authenticity and authority of the voter ID card. If the person for some reason does not have a voter ID card but their name is on the roll, the person can still vote provided that the person provides a valid and genuine form of identification such as a driver’s license or PNG passport. If the person’s does not have a voter ID card and their name is not on the roll, the person cannot vote. The use of the voter ID card against the roll will help to significantly reduce the number of eligible voters not voting if their names for some reason are not on the common roll as seen in the recent election.  

 

The process by which the indelible ink is used to mark the finger of a person after voting will also be changed. A person will have to dip their finger at least half-way into the ink instead of just a line on the finger tip. An appropriate ink for that purpose will be used and can last up to a month on the finger. This process will eliminate the practice of removing the indelible ink by using acidic fruits, bleach or other chemicals. 

 

d) Improvement of Counting Process 
Given the recent experience with the significant mistrust in the counting processes in the last election that led to a lot of delays, a regional/provincial rotational system of counting officials will be developed whereby counting officials from one region (e.g. New Guinea Islands) will be moved to another region (e.g. Momase region) to take charge of counting. All counting will be undertaken by officials not originally from the province so that the integrity of the process is respected by all parties/candidates of the particular electorate which the counting is taking place. A volunteer registration system can also be developed to recruit individuals in the provinces to be involved in the rotational system of the counting process, provided that these individuals have a neutral standing in the community. These are options that can be considered to improve and instill trust in the counting process.  

 

e) Promoting Minority Rights and Rights of Vulnerable Groups 
An awareness raising campaign would be conducted to promote the political rights of minority groups (women, people living with HIV/AIDS and disables), vulnerable communities (those affected by climate change, natural disaster or ethnic conflicts) including PNG citizens living/working abroad to participate effectively in the elections. The rights of minority and vulnerable groups will be reflected in legislation and/or policy. For the elections to be a truly democratic process, these groups of citizens need to be empowered to participate in the election process. To promote the rights of these groups a Goodwill Envoy who may be a popular international, regional or local musician/band or artist can be selected and sponsored for various awareness events leading up to the elections. 

 

 

MID TO LONG-TERM PRIORITIES 

 

f) Legislative Review 
The Organic Law on National and Local Level Government Elections is outdated and needs a thorough review to embrace the changes in society, evolving political culture and the needs and issues of this present time. The review will allow the Electoral Commission to effectively administer elections. A legislative review should consider issues such as: (a) political rights of citizens abroad, and minority and vulnerable groups in society; (b) introduction of a biometric and/or basic voter ID Card system; (c) the procedures of postal voting to allow citizens outside of country and those absent during election period from their electorate; (d) clearly defined roles of Returning officers, Assistant Returning Officers, Presiding Officers and Scrutineers; (e) a swift and inexpensive process of decision-making by Courts on election disputes and petitions; (f) enhancing powers of the Electoral Commission and; (g) setting reasonable limits to campaign expenditure. These are few of the major issues but there is a critical need to review the entire legislation so that it reflects the changes in the social, economic and political dynamics of the PNG. The review may also embrace some of the points discussed below in this proposal. 

 

g) Counting and Declaration of Election Results 
This process is proposed to be reflected in the legislative review where after the counting of all ballot boxes the provisional election results will be immediately provided by the Returning Officer to all candidates and political parties in an electorate. The candidates/parties will be given 72 hours to make a claim or appeal against the provisional results. If there are any claims/appeal against the winning candidate or provisional results, a special court much like the Court of Disputed Returns in each province will convene immediately to make a final decision within 7 days subject to evidence provided. After the Court’s decision the final results of the election will be officially tabulated and announced. This process will take not more than a week and the court’s decision is final.  

 

This process will significantly reduce the waste of resources, time, money and effort incurred by the State, aggrieved and declared candidates through the Court of Disputed Returns and allow the winning candidates to assume their mandates and immediately move on with the responsibilities in their electorate, province and at the national level.   

 

h) Out of Country and Postal Voting 
The Organic Law on National and Local Level Government Elections allow for the use of postal voting by PNG citizens living/working abroad however this process has never been implemented since 1964. Postal voting for citizens living abroad will be piloted in at least two countries (Australia and New Zealand) where there are a significant number of PNG citizens residing. Particular Diplomatic Missions of the country abroad can also be identified as regional postal voting locations (e.g. Brussels in Europe, Singapore in Asia, Washington DC in Americas and Canberra in the Pacific) whereby votes of citizens in that region can be sent to these Missions to forward on to the Electoral Commission. The Organic Law on Elections will be reviewed to have specific provisions on the eligibility of citizens abroad, the required proof of citizenship and the electorate by which they will vote for to allow citizens abroad to exercise their democratic and political rights. Electoral Commission will be working closely with the Department of Foreign Affairs and PNG Immigration & Citizenship Service Authority to implement this initiative.  

 

Postal voting will be conducted and postal ballots received by the Electoral Commission a week prior to the nation-wide polling schedules. An electoral officer will be seconded to PNG consular offices overseas in the period of postal voting and will be responsible for administering the process. The process of postal voting will also be implemented for those citizens that may be traveling during the election period, those that will be engaged in providing security (e.g. Police and Defence personnel) during elections and those that are sick, disabled or unable to vote in person for reasons beyond their control.    

 

i) Defining the role of election officials 
The Returning Officers, Assistant Returning Officers, Presiding Officers and Scrutineers play a very important role particularly in the counting process and their roles need to be clearly defined in legislation if not in policy. Experience in previous elections as well as the last election has shown that the counting process can be easily hijacked if the roles of these officers and their powers are not clearly defined and demarcated. While scrutineers in particular play a vital role in ensuring that ballot papers are clearly allocated and votes counted they should never overpower the Returning Officers and disrupt continuity of counting process especially in light of timeframes that are set for the declaration of results and return of writs. Nevertheless, clear processes and procedures must be in place for the grievances of scrutineers to be effectively taken into consideration. The legislation and/or policy would be revised to improve a clear coordination and understanding of roles and responsibilities between these officials.  

 

j) Enhancing the enforcement powers of the Electoral Commission 
The legislative review will also take in account and enhance the powers of the Electoral Commissioner to suspend elections or polling and counting processes if there is a critical security risk and widespread violence that affects or prevents citizens from freely, fairly and safely participating in the election process. The people must learn to respect democratic election processes and until they respect that process they will not have a representative in Parliament. The Electoral Commissioner must have the powers to put on hold the election process in an electorate or province indefinitely in the case of widespread violence and electoral fraud until the people come to a compromise to guarantee a free, fair and safe election.  

 

In the elections conducted over the years the Electoral Commission has never taken a strong stance in prosecuting cases of electoral fraud and abuse. Candidates can sign up to the rules of “fair play” and to provide speedy and effective processes for dealing with breaches of electoral laws. Accepting the need for independent scrutiny by the Courts, the Electoral Commission should be able to act as Plaintiff, not just as Defendant, in enforcing electoral law. Consideration will be given to establishing a special “Election Tribunal” with election and legal expertise to consider breaches of the electoral laws during elections. If the Electoral Commission had reliable evidence of a person breaching the campaign laws (for example, bribery) it should apply to remove the Candidate from that election. If the vote had already taken place, the first preference would be removed just as if that candidate had been eliminated, and other preferences re-allocated. The new message needs to be: breaching electoral rules is not to your advantage. The old message effectively was: anything that improved the chances of winning was acceptable. 

  

k) Limits on campaign expenditure 
To prevent domination by only the wealthiest in elections, many countries have reasonably effective limits to campaign expenditure. Without clear rules spelling out acceptable expenditure and banning “traditional gifts”, such limits would be completely unviable in PNG. All politicians and indeed their communities should share an interest in setting effective limits on campaign expenditure. I accept, however, that enforcement is a major problem. But legislation can empower the Electoral Commission to establish such limits by Regulation, when it deems that reasonable enforcement possibilities exist. 

 

l) Candidates to declare assets 
It makes little sense to clean up elections without linkage to corresponding sanctions in public office to stop the cycle of corruption. Obviously there are existing processes in place in this regard, but consideration could be given to requiring all Candidates (not just elected MPs) to submit declarations of assets to the Ombudsman as part of the nomination process, and to provisions which would mean that any false declaration rendered the person ineligible to stand for a defined period. The purpose of the recommendation is firstly educative (in reminding candidates that they embark on a process where their overall integrity is on the line) and secondly to lay the basis for possible later investigation if relevant. Playing by the rules should not be just one option in a game of winning at all costs – it should be a condition for being a candidate or holder of public office. 

 

m) Abolishing by-elections 
The legislation will be reviewed to as much as possible allow the abolishment of by-elections. Consideration will be given to abolishing by-elections under certain conditions. Under First Past the Post (FPP), “winning” candidates routinely received less than 10% of the overall vote. With three votes under LPV, there is solid evidence that a far wider democratic mandate would have been won by even losing candidates than was often secured under FPP. It would, in my view, be perfectly legitimate to consider requiring the Electoral Commission to complete the count in a manner that would allow the reallocation of votes in the event that a person lost his or her seat. Careful attention to detail would be necessary, including possibly requiring a by-election in the event of the death of an MP or under extraordinary circumstances the voluntary resignation of an MP. Other factors would include situations where a person was removed because of, say, mass multiple voting that threatened the integrity of the ballot, that person’s entire vote would be excluded, including all three preferences (because of the fraud). But in principle, it should be possible to allow the reallocation of votes of a person who lost her or his seat, to establish a successor with the next highest mandate. This alone, would save millions of Kina and allow the Electoral Commission to concentrate on the Roll between elections.

Less Money, Less Vote Buying

By: Political Observer

Reports received from 2017 NGE candidates across the country is that they are running out of money for their campaign. It seems most are wishing and hoping that June 24th arrived so ends the campaigning.

We still have 5 weeks to go and most Political Parties and Candidates have run dry.

Kerengu Kua stated to ABC that this has several implications for PNG democracy.

However, the alternative viewpoints also is that, this will see a test of candidates who heavy rely on “Vote Buying” to change their strategy and start using “development policies” to win votes.

Most candidates dont have a practical Political Platform and the lack of money in spending will put “Spot lights” on alternatives which they can offer rather than “vote buying” and big ceremonies.

Strong Political Platforms will be the Big Winner this election..


Papua New Guinea’s cash crunch saps colour from election campaigns

 

Tough economic times are affecting Papua New Guinea’s normally colourful election campaign.

Candidates and parties are crying poor, and that has meant the normally feverish campaign is more subdued than expected.

The leader of the PNG National Party, Kerenga Kua, said that has implications for PNG’s democracy.

Kua
It’s election season in Papua New Guinea, which means it’s time for colourful campaigns, rallies and outlandish promises by candidates.
“There is less colour, less movement, and that’s not good, because you need to have some level of activity for educational purposes,” he said.

“The messages from candidates need to go out for the people. To do that, they need money and they don’t have money.”
Voters usually expect campaigns to be a period of uncharacteristic generosity from their incumbent politicians and intending candidates.

In the past, many have received inducements to support particular candidates, such as money, food or alcohol.

“They think the candidates will give them money, they will take the money as something they always wanted and they use the money and they cast their votes,” she said.
“They’re not thinking about the future of how they will enjoy the benefits of the government doing some good things for them, because they need money now.

http://www.abc.net.au/news/2017-05-22/pngs-cash-crunch-saps-colour-from-election-campaigns/8544274?pfmredir=sm

 

 

World Bank to assist PNG Sovereign Wealth Fund setup

May 14, 2017 – By ROSALYN ALBANIEL

THE World Bank will be assisting the Bank of Papua New Guinea establish PNG’s Sovereign Wealth Fund Secretariat.

This was announced last Friday by BPNG governor Loi Bakani during an update on the matter.

“We got a visit from the World Bank and have got someone on the ground to help us set up that office. This is the administrative secretariat reporting to the board of the SWF,” Mr Bakani said.
Mr Bakani said there had been some issues on the appointment of the board of directors for the fund but said this is being handled by accounting firm KPMG under the directions of the Department of Treasury.

“As far as the secretariat is concerned, we hope to have someone very experienced on the ground to set up the office that will coordinate work here and we will set up the office once everything is in order,” he said.

On the issue of revenue flow into the fund, he said the main providers would be companies in the mining and petroleum sector including the LNG projects.

In the case of the multi-billion kina PNG LNG project, he indicated that this was likely to happen round about 2021, 2022 onwards.

“The national budget is framed around that time. This is when government expects the budget will also be balanced.”

“This is when government expects the PNG LNG will start paying taxes.”

“As it is, we have not got any foreign exchange from this project.”

“Until and unless the accelerated depreciation ends, which is seven to eight years, is over since first export in 2014.

“This is when we will see some taxes. It is still a long way away,” he said.

Releasing more land key to increasing Papua New Guinea home ownership

By: Kevin McQuillan
3rd May 2017

Demand for housing in Papua New Guinea is strong but there is a shortage of supply, according to the latest survey by Hausples, a Port Moresby-based real estate company.

The Hausples.com.pg 2017 survey shows that working class Papua New Guineans are beginning to understand the value that home ownership brings to their families and they are increasingly investing in their own properties, according to CEO and founder, Mat Care.
‘Despite Port Moresby’s high prices, most people (62 per cent) feel that now is an opportune time to purchase a property,’ he tells Business Advantage PNG.

According to a report by the ratings agency S&P Global, Banking Industry Country Risk Assessment: Papua New Guinea, average growth in PNG property prices, adjusted for inflation, has been about 8–11 per cent over the past four years.
‘New constructions in PNG’s housing market are largely funded through direct foreign investment or superannuation funds, with little leverage and little direct participation from the banking sector,’ the report says.
‘We estimate around 15 per cent of the banking system’s lending exposures are to property and related services, remaining unchanged in recent years.’

 

Supply

Mat Care ‘firmly believes’ that more effort should be made to increase supply, which he says will bring house prices down and increase access and affordability.
‘Housing is a critical factor in the continued development of PNG,’ says Care.
‘The country’s urbanisation rate of 12 per cent is incredibly low by global standards. Southeast Asia’s least urbanised country is Cambodia at 24 per cent.’

‘It is critical for landowners and the government to seek novel and fair ways to release more land.’

Care says that, despite the low urbanisation, the survey confirms the ‘very substantial housing shortage’ throughout the country.
‘Property development on customary land with long-term, 99-year leases, is becoming more common within the NCD [National Capital District] and Central Province,’ he says, citing Edai Town as a successful example.

edai
Standalone House in Edai Town

‘Whether customary land should be converted to freehold land is a policy issue for the government and the existing customary land holders,’ he says. ‘Potentially, a voluntary system of conversion, subject to appropriate compensation, could be considered.
‘Regardless, it is critical for landowners and the government to seek novel and fair ways to release more land for much-needed housing.’

 
BSP inquiries increase

Kanawi Chapiu, Bank South Pacific’s (BSP) Home Loan Coordinator, says home loan inquiries have risen. Potential customers show interest when they see others successfully buying their own house.
Since its inception in 2014, BSP has approved 534 home loans valued at K270 million under the BSP First Home Ownership Scheme (FHOS).

BSP Home ownerships
The average purchase price in the market is under K500, 000, Chapiu tells Business Advantage PNG. The Hausples survey backs that up, revealing that 70 per cent of people intend to spend less than K500,000 on a property. Thirty per cent are intending to spend K1 million or more.
Care says just over half (56 per cent) of respondents are seeking to buy a property in the next 12 months, while over 26 per cent said they would consider buying property in the next 18 months.

 
Capital preferred

Port Moresby remains the preferred place to own a home, with more than 80 per cent of survey respondents indicating they would like to buy in the capital.
Chapiu says there are no restrictions to lending outside of Port Moresby. ‘In fact, BSP has seen an increase in home loan inquiries from other major centres in PNG such as Lae, Kokopo, Alotau and Madang’.

‘All intending home owners who apply for a home loan are subject to meeting credit risk requirements.’

The bank uses a mortgage over the house as its collateral. A mortgagee cannot spend more than 40 per cent of their income on the mortgage.
Chapiu says all intending home owners who apply for a home loan are subject to meeting credit risk requirements. ‘They must ensure that the property or land they plan to purchase must be on state lease land with the title issued.’

 

Planning needed
The Institute of National Affairs has written many research papers and run workshops on the issue of what its Director, Paul Barker, calls ‘the absence of formal management of the urbanisation process’.
This failure, he points out, has seen prospective settlers, customary landowners, businesses and opportunists ‘do their own thing, often outside the formal legal process, and following the principle that possession is nine-tenths of the law’.
Barker wants a major effort to upgrade and generate safe towns and cities, with affordable housing, amenities, utilities, public transport and recreational are

Housing boom?

Hausples CEO Mat Care estimates that 5000 to 6000 new affordable and middle-income houses will be built in Port Moresby over the next 18 months, with up to 50,000 additional homes slated to be built by 2020.

‘These comprise government initiatives such as the National Housing Commission’s mega-development at Duran Farm which will comprise 44,000 dwellings (standalone 2-3 bedroom houses),’ he says.
Other smaller private developments include:
– Mediterranean Apartments (48 units comprising bedsit and 2 and 3 bedroom homes);
– Community Housing Limited’s proposed development at 9 Mile (160 stand-alone 3 bedroom houses);
– Edai Town, 300 homes (2 and 3 bedroom homes).

The high-end domestic and expatriate housing market is predominantly apartment-focused in central Port Moresby.

This includes:
– Airway’s new 3-bedroom development specifically for the LNG Project;
– Credit Corporation’s Era Motana development (2 and 3 bedrooms)
– Ela Vista’s Gardenia Apartments (2 and 3 bedrooms);
– Nambawan Super’s Pinnacle Apartments (2 and 3 bedrooms).

Higher commodity prices the key to improving Papua New Guinea credit ratings, says Standard & Poor’s Global Ratings

By: Kevin McQuillan

High debt and deficit levels are the reasons why ratings agency Standard & Poor’s (S&P) has kept its Papua New Guinea country rating at B+/B, with a negative outlook. S&P Director, Craig Michaels, tells Business Advantage PNG that higher commodity prices are the key to lifting the rating.
Michaels, the Director of Sovereign and Public Finance Ratings, says the decision reflected the high levels of offshore debt and high government deficits.
‘These have been driven, directly or indirectly, by the large LNG project, and we thought those external and fiscal imbalances would unwind pretty quickly once the LNG project came on line,’ he told Business Advantage PNG.
‘But unfortunately, just as that happened, commodity prices globally fell very sharply.
‘So the revenues that were due to come on stream at that point have been coming in much more slowly and that’s why we have continued our negative outlook on PNG ratings.’

 
Forceful

Sovereign ratings are used as an indicator for setting a country’s base interest rate. They also have an effect on its ability to raise offshore financing, which the PNG government has been attempting.
PNG’s rating has been comparatively stable. S&P has maintained its B+/B rating for over five years, although it converted its outlook to negative in October 2015, when commodity prices began to weaken.
Michaels says the government has responded ‘forcefully’ to the revenue declines through savings decisions, and by targeting declining fiscal deficits to keep debt within its targets.
Overall spending between 2014-2016 fell by about 13 per cent over this period, with the result that the fiscal deficit narrowed to 4.4 per cent of GDP in 2016, from 6.9 per cent in 2013.

‘We project PNG’s general government net debt to remain comfortably below 30 per cent of GDP.’

‘Despite an election in mid-2017, we expect the deficit to narrow further this year to less than 3 per cent of GDP,’ he says.
‘On this basis, we project PNG’s general government net debt to remain comfortably below 30 per cent of GDP.’
Michaels warns, however, that if the government fails to continue to restrain spending adequately, or if growth in the nominal economy comes under even further downward pressure, net general government debt could rise above 30 per cent.

Fiscal-operations-of-government
PNG Government revenues, expenses and deficits/surplus – Source: Bank of PNG. 2017 Budget Papers

 
Debt financing

Michaels believes domestic banks and pension funds have nearly reached their limits for lending to the government, and that the central bank is acting as lender-of-last-resort when government bond auctions are undersubscribed.
‘The limited demand for government debt has led to a sharp rise in yields on government paper in recent years, and the government’s interest burden has risen significantly as a result.’

‘Michael says one of the key challenges for PNG’s overall growth prospects is the high level of crime.’

Gross external financing needs are currently at 80-90 per cent of current account receipts, and likely to remain at that level as ‘it appears the government is very committed to keeping debt within its own debt limits’.
Michaels laments that, despite some recent improvements, there are gaps in economic and external data, as well as a lack of transparency in public-sector accounting.

 

Growth

Michael says one of the key challenges for PNG’s overall growth prospects is the high level of crime, ‘which we think is a major deterrent for investment outside the resources sector’.

‘S&P could return the rating outlook to ‘stable’ from ‘negative’ if we become convinced that the high level of external debt and the pretty sizeable fiscal deficits will continue to decline in a reasonably quick way.’

He expects growth to be 3 per cent in 2017, up slightly from 2.6 per cent in 2016.
‘The medium-term economic outlook hinges on whether further large foreign-financed projects—such as the Papua LNG project—go ahead.’

 
Upgrade

Michaels says S&P could return the rating outlook to ‘stable’ from ‘negative’ ‘if we become convinced that the high level of external debt and the pretty sizeable fiscal deficits will continue to decline in a reasonably quick way’.
‘And that will probably largely hinge on what happens with commodity prices.’

SO WHAT’S THE ALTERNATIVE?

By: Douveri Henao

The past couple of days, we’ve seen politicians and commentators rushing to the public to remind us that they made these predictions years ago the economy was tanking. They read the signs, saw the writing on the wall and as prophets of old, we did not respond. All true. But the people of Papua New Guinea don’t want reminders, they want solutions and this is the disappointment for the past couple of days.  
The only agreed consensus is kick out the current government and all will be well. Lets entertain the notion, but then what? How do you improve the economy? How do you turn the tide around?  

I’m of the view that any new leadership will be constraint by 2 factors to make meaningful change in the state of the economy in which all governments of PNG suffered. These are the inability for political institutions to reform the age-old patrimonial system and the lack of diversity in political ideology. 

PATRIMONIAL SYSTEM REFORM 
Respected thought leader in political science, Francis Fukuyama, makes the observation that patrimonial systems or in our case, wantok system, continues to undermine the ability for political institutions to grow into efficient organizations. Whereby meritocracy permits the best and brightest to formulate and execute public policy to the best of their abilities.  
The fiscal strategy of the current government has been underpin by the need to finance the patrimony. Over 12 billion kina has been given to sub national governments with limited capacity to absorb its use. While Waigani correctly claims its systems are able to deliver and execute projects of significance, no other government tier has the skills and resources. Therefore, this resource has largely fed the patrimony in an assortment of various schemes that have little impact to the constituency. 
There is also the bulging public service that is unsustainable and at most times, unproductive. It has cost the country 10 billion kina in this session of parliament. Public institutions have become villagers where CEOs have become chiefs and officers from there liking have become nobles and enemies have become commoners. So the nobles and the chief thrive on this healthy state bill to build there kingdoms and along the way, execute meaningful public policy.  
This Prime Minister and those before him have publically spoke of the rot that they have inherited in the public service. They have used various systems to mitigate patrimony and while some have been successful, many have not and its persistency undermines the fact that we need a different strategy.  
The key position is for the new leadership to work towards transitioning the current patrimonial political system to a robust merit based system not in the public service, but in the political system. Its ok to use wantoks, but use wantoks that know their stuff. Instill benchmarks to push productivity and inculcate a climate of vigorous science in building policy. This in turn can assist the public institutions to deliver the desired vision.  
THE NEED FOR DIVERSITY IN POLITICAL IDEOLOGY 

Every Prime Minister and current MPs as well as most political parties have subscribed for a strong socialist left leaning political platform. Big governments to bring social programmes to the masses, big governments to drive commerce, big governments to protect the community and big governments to bring jobs.  
While there is justification in this messianic approach due to market failures that undermine investment beyond Waigani and provincial capitals, it undermines other important players to participate in development. The efficiencies of the private sector and the enthusiasm of the civil society need to coexist and where possible, thrive.  
The new leadership needs to facilitate rather then participate and monopolize development. There are something’s that the public service and political systems isn’t built for and that limitation needs to be recognized.  
BEYOND 2017
We need political systems to be less emotional and more juiced up on the smarts. We need political systems to be more facilitative and less monopolistic.

Ela Beach gets timely Facelift

By: Jonny Andrews

I have been watching with interest the developments happening at Ela Beach.

It saddens me that most of the trees will be cut for this development but I am reminded that in order for something/someone to be remold they had to be broken into many many pieces.

Papua New Guinea is growing and with growth comes development. Development of infrastructure,  development of its tourism industry and development of its landscapes.

We continually compare ourselves to the Arab Nations but we must understand that, they reached that stage by starting off where we are right now. It was not an overnight miracle, it was a progressive development that changed their nation.

The Ela Beach Redevelopment it seems has 3 Contractors working on it.
1. Apec Haus and the Marina by OSL
2. Ela Beach Waterfront by CHEC
3. ?????  – this would be another company which will develop the area towards Koki

It is not only the Beachfront that is getting developed, the properties opposite the road would also see development. Currently, there is a plan to redevelop the IEA School, Ela beach hotel and properties inline with the whole development of Ela Beach.

This development of Ela Beach will join the Paga Hill Development and make it one of the biggest Development in the Pacific Region compared to other Pacific Island Nations.

Papua New Guinea is moving forward, it is time we also move our mindset and look forward to greater participation in our own land.

 


Port Moresby’s iconic beach to be modernized at a cost of K55 million. New developments to include APEC and a 4-lane highway
THE Hiri Moale Festival will be allocated space in the current redevelopment of the iconic Ela Beach in Port Moresby.

ela-main
Redevelopment of IEA in Ela Beach

This was made known by Member for Moresby South Justin Tkatchenko when he responded to questions on the redevelopment of the beach.

He added that the Motu-Koita Assembly, the voice piece of the Motu-Koitabu landowners of traditional Port Moresby, was in agreement of the redevelopment of the beach front which would bring in new jobs.

The annual three-day event, which culminates in the crowning of Miss Hiri Hanenamo, promotes the culture of the Motu coastal villagers

Mr Tkatchenko was also asked on the controversial issue of the land title which he fought to have extinguished after it was awarded to Awak Holdings Limited two years ago.

“I did not agree with the way the title was handed to Awak Holdings via the Lands Department.” Awaks development plan had also entailed reclamation of the shorefront about 50 metres but it met with opposition from Mr Tkatchenko and traditional landowners.

09ak_trees_0
Ela Beach Redevelopment by China Harbour Construction

“The beach front comes under National Capital District Commission and it is State land, open space and recreational.”

He added that after the extinguishing of the land title, the title was publicly tendered by NCDC and awarded to Cardno and China Harbour Engineering Company for the roadworks.

The Ela Beach Foreshore Development Plan was unveiled in September last year.

In that plan the beach front will undergo two stages of development with stage one will see completion of APEC Haus to be constructed on NCDC’s sea park land. APEC Haus will be the venue for the Asia-Pacific Economic Co-operation Leaders’ Summit next year.

The second major development would be the construction of Ela Beach Road as a four-lane road to align with Healy Parade and Paga Point Ring Road; construction of about 300 car parks; and redevelopment of Ela Beach as per the unveiled master plan.

NCDC had dedicated its land being the former sea park jetty for the construction of APEC Haus. Post Courier /ONE P

 

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$17 million road improvement, beach extension project in Port Moresby

By Benorah Hesehing

PORT MORESBY, Papua New Guinea (The National, Feb. 10, 2017)

Work will begin today to give Port Moresby’s iconic Ela Beach a K55 million [US$17 million] facelift.

 

NCD Governor Powes Parkop said the redevelopment project involved the construction of a two-lane road and an extension of the beach by another 100 metres.

“The work will begin tomorrow (today) and I am calling on the public for their understanding and cooperation,” Parkop told a media conference yesterday.

“There will be some disruptions for the earth work but we intend to keep the existing roads operational while the new lanes are being constructed.

Ela beach Road Map
Road Map for Ela Beach Redevelopment

“Some of the trees, shrubs and palms which provide shade would be removed to create way for construction.”

He added that the National Capital District Commission was doing all it could to retain the old trees. “We understood that the older trees were part of the Ela beach heritage and are working hard to save those, which can be saved,” Parkop said.

He said the people should not think about what they would lose, but what they would gain from the redevelopment project.

Ela-Beach-Marina-Development
Ela Beach Marina Hotel

Moresby South MP and Minister for Sports and National Events Justin Tkatchenko said the project was a “fantastic achievement for NCDC”.

“We can plant advanced trees within the landscaping for Ela Beach to ensure what is replaced is suitable or even better,” he said

Ela-Beach-Marina-Development-1
Ela Beach Marina with APEC Haus in the Middle

 

Australia’s ‘Boomerang’ Aid should be directed into PNG National Budget

By: Bernard Keane 



Who profits from our foreign aid?: the ‘technical assistance’ making business rich

Australia’s “boomerang aid” has been making corporate Australia very rich for years.

“Boomerang aid” is the name Michael Somare claims he invented to describe the propensity of Australian aid to PNG to end up back in Australia, courtesy of highly-paid Australian consultants and firms specialising in “technical assistance” in the delivery of aid projects. For a small number of firms, it has provided a taxpayer-funded path to massive success.

“Technical assistance” is a billion-dollar business funded by Australian taxpayers. This year, we will spend $4.3b on foreign aid. Under the Government’s commitment to increase foreign aid to 0.5% of Gross National Income, that is scheduled to rise to $8-9b in five years’ time.
Technical assistance over the last decade has accounted for 40-50% of the entire aid budget.
A small number of Australian firms have done very well from this:

* Coffey International, the Chatswood, Sydney-based “global professional services consultancy”, garnered over $300 million in contracts in calendar year 2009 alone, Ausaid records show;

* Cardno ACIL secured at least $270 million, as did GRM, “a leading international development management company”;

* Queensland companies GHD and JTA International, both reaped over $100 million.
Boomerang aid has long been a basis for criticism of AusAID and our entire foreign aid program, particularly in relation to PNG, our largest aid recipient. In 2003, Michael Somare suggested over 60% of Australian aid simply went to Australians or Australian companies.
That year, the Senate Foreign Affairs, Defence and Trade References Committee considered the issue as part of its report on Australia’s relationship with PNG and the Pacific, saying that the “most common concern raised with the Committee in relation to the delivery of aid was for the tendency for AusAID to use consultants, typically from Australia which lead to the perception of ‘boomerang aid’.” 
A number of submissions to the committee raised the issue, including those from the Business Council of PNG and from Oxfam Community Aid Abroad.
In response, AusAID rejected any criticism, declaring the “Australian aid program ensures that PNG citizens benefit from commercial opportunities, skills formation and capacity building.”
Papua New Guinea through its planning Minister Charles Abel recognized this gap in the Australian Aid and has proposed to negotiate the new AID Agreement.

“We would like to see a larger proportion of the budget actually going into hard, tangible, on-the-ground outcomes,” he said.

“Budgetary support will assist in programs and activities that the Government is trying to achieve and that alone will achieve a lot more positive outcomes than what’s going on at the moment,” 

Aid to be effective needs to be channeled into PNG’s national budget as opposed to being distributed by Australian Technical Assistance Team.

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Papua New Guinea asks Australia to fund health, education during ministerial forum

BY PAPUA NEW GUINEA CORRESPONDENT ERIC TLOZEK –THU MAR 09 11:19:03 EST 2017
Australia’s increasingly tricky relationship with Papua New Guinea could be about to get more difficult.


PNG’s Government has asked Australia to directly fund its health and education spending after it suffered a severe economic downturn and was forced to make major budget cuts.

PNG used the 25th ministerial forum between the two countries to ask Australia to shift its $500 million of annual aid away from narrowly-focused programs and into helping fund its health, education and infrastructure priorities.

Planning Minister Charles Abel said the shift was something that had been discussed for some time.

“The Papua New Guinea Government has sent a signal at this meeting of our desire to move by 2020 into a budget support arrangement where the program is channelled more directly through the PNG budget process,” he said.

Australia is the dominant contributor of aid to PNG, providing 68 per cent off its development assistance.

Mr Abel said that money could be having a bigger impact.

“We would like to see a larger proportion of the budget actually going into hard, tangible, on-the-ground outcomes,” he said.

PNG’s Major Events Minister Justin Tkatchenko said the request arose out of concerns about the effectiveness of Australia’s aid program and the amount of money that is spent on contractors and technical assistance.
“Budgetary support will assist in programs and activities that the Government is trying to achieve and that alone will achieve a lot more positive outcomes than what’s going on at the moment,” he said.

The request came as a surprise to the Australian ministerial delegation.

It also came after PNG suffered a major drop in revenue that forced its Government to slash spending, particularly to health services, but Mr Abel rejected suggestions it was linked to PNG’s cash shortage.

“It’s a policy-based directive that has come from a series of documents … it’s not a knee-jerk reaction,” he said.

Request catches Australian ministerial delegation off guard
Australia’s aid partnership with PNG is due to be renewed this year, so the Government was already evaluating the program.

But Foreign Minister Julie Bishop said Australia did not know PNG would make the request.

“That’s apparently a matter that’s been discussed within the PNG Government, it’s been raised with us today and we’ll consider it,” she said.

The change harks back to the way Australia used to deliver aid in PNG, by funding its budget directly.

But Australia stopped doing that in the early 1990s because of concerns about corruption and mismanagement.

Those concerns have not gone away.

Ms Bishop said any change to the aid program would need to meet Australia’s accountability standards.

We want to ensure that it’s transparent, that it’s value for money and it provides the kind of outcomes that will see economic development and prosperity here in PNG,” she said.

“And of course we must be answerable to the Australian taxpayer.”

The Government fears those taxpayers are becoming increasingly sceptical about the benefits of foreign aid.

Questions over how aid spending is getting to people who need it
The timing of the request, as PNG tries to weather a severe economic downturn, makes it even harder to sell.

Australia has given $5 billion in aid over the last decade, but has been changing its approach for the past few years.

The Australian Government, which has consolidated delivery of its programs into a Papua New Guinea Governance Facility, will be investing more in infrastructure and is seeking more partnerships with agencies like the World Bank and Asian Development Bank to deliver soft loans.

Such changes reflect a broader shift in aid spending, but also an attempt to make a bigger impact and force the PNG Government to comply with the strict standards for governance and program delivery required by multilateral agencies.

Australia also agreed to focus more on private-sector growth and trade, which would help protect and increase the $6.8 billion PNG-Australia trade relationship in the face of threats from China.

But the non-government organisations working in the aid sector have criticised that approach, saying PNG is a clear example of a place where economic growth has not delivered much benefit for disadvantaged people.

Despite 15 years of continuous growth, PNG still has one of the lowest levels of GDP per capita in the region.


Manus issues causing tension
It might not say so publicly, but the PNG Government has also been recently displaying frustration with Australia in other ways.

There has been tension over the Manus Island detention centre, particularly over the need to close it to comply with a PNG Supreme Court ruling.

People within the PNG Government say they are frustrated about the impact of the centre on PNG’s reputation, the political risk to the current Government, and the social issues that the day release of detainees has created on Manus Island.

That frustration has been accentuated by a delay in Australia delivering a promised $200 million redevelopment of the Angau hospital in Lae, which was agreed upon as part of the Manus Island deal.

Detainees at Manus Asylum Seekers Detention Center

Australia argues the delay is due to the PNG Government withdrawing its promised contribution, but PNG said it told Australia two years ago to just “get it done”.

Recent allegations that the medical company that runs the clinic at the Manus Island detention centre failed to obtain proper registration and breached a raft of other PNG laws — something strongly rejected by the company — could be seen as PNG putting further pressure on Australia to hasten the centre’s closure.

There has been no shortage of people noting the detrimental effect of the Manus Island deal on Australia’s ability to negotiate with PNG, but with the urgency increasing to close the centre by October, PNG could be looking to squeeze even more benefit out of its relationship with Australia at this time.

That has left Australia with a problem for both its aid program and its diplomatic relationship with the most populous and arguably most influential country in the western Pacific.

Kumul Telikom Holdings – Right Stepping stone for Papua New Guinea

By: Jonny Andrews

Telecommunications is the ‘Heart-beat’ of every thriving economy!

How does one disrupt and conquer a nation? They simply break down the communication between all important Government utilities and department. Put them into a state of confusion and slowly conquer and take control.

Sound familiar???

The advised Papua New Guinea has been getting in the past of ensuring competition and to separate the Telecommunication entity has been flawed! It has resulted in the State communications entity competing against itself and ensuring that the real competitor succeeds!

The birth of Kumul Telikom Holdings is the realization that we have lost the plot and the need to get back on track is imminent! Kumul Telikom Holdings is the ‘Stepping Stone’ on improving the Telecommunication system in the country. 

It provides for a SINGLE Board that ensures the DataCo, BMobile and Telikom Management works effectively, do no compete against each other and provides a roadmap that actually provides greater benefit to the country.

Well done PNG Government!


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Consolidation of SOEs right move: Barker

March 6, 2017The NationalMain Stories

 Article Views: 169

The recent consolidation of telecommunication State-owned enterprises under Kumul Telikom Holdings “is the right way forward”, according to Institute of National Affairs executive director Paul Barker.

Barker, pictured, told The National that this arrangement would be ideal if complemented with effective management that resulted in enhanced competition in the sector for the benefit of businesses and rural areas.

“Consolidation of the domestic network and linking the key gaps, notably the Northern network with the Hides-Port Moresby link, while rationalising the multitude of State-owned entities, is the right way forward, so long as the best professional board and capable, innovative but prudent management is in place,” he said.

“Operations also be accountable and transparent.

“Real rather than superficial competition is needed, but it’s not logical for that competition to be between ill-resourced State-owned entities but between a stronger, single telecommunications State-owned entity and the other players.

“Consideration of selling off or part sale of the State-owned entity may be considered to increase capitalisation and capacity but the State retains an important role in this space as regulator, encouraging and requiring competition, and ensuring priority services reach the wider communities of PNG, as well as enabling businesses across the country to function, including in rural areas.”

Barker highlighted the need to upgrade Government-owned telecommunication infrastructure with possible adjustments to increase bandwidth from submarine cables.
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MINISTER ABEL CLARIFIES THE KUMUL CONSOLIDATION AGENDA
Wednesday February 22, 2017 –Minister for National Planning, and Acting Minister for Public Enterprises and State Investments   Hon. Charles Abel today called a media conference to clarify the Government’s main policy priorities through the Kumul Consolidation Agenda.

Minister Abel stated:

* At the outset, our focus should be on ensuring that all relevant boards and MDs/CEOs of the SOEs are in place and addressing all operational issues;

* The government’s overarching objective is to progress the social and economic well-being of the citizens of Papua New Guinea;

* This includes promoting an efficient enabling environment (policies, regulations and legislations) for private sector as the primary generator of wealth and job creation to flourish;

* Government generally only intervenes in the private sector as an active participant when private capital or entities will not and the particular service is vital or strategic;

* The Kumul Consolidation Agenda is intended to improve synergy, coordination and efficiency to the National Government’s participation in commercial activities;

* This includes the aggregating of related Government companies in different sectors such as Telecommunication, energy, agriculture, etc;

* The Department of Public Enterprises is to provide policy development and oversight in concert with the Minister and Cabinet. It is not to get involved in project development. Any such projects are to be handed over to the relevant subsidiary companies or ceased;

* KCH is to oversee the implementation of government policy through the respective subsidiary companies including the most appropriate corporate structuring in relation to the non-mining & petroleum related majority owned government companies;

* This government policy includes capital structuring to involve private capital and management as much as possible;

* KCH should cease developing numerous business projects and only get involved in project development for large scale strategic capital projects on behalf of the sector specific subsidiaries;

* All government companies should generate an adequate return of capital; and

* All government companies should be restructured in order to free up resources and introduce efficiency into the economy unless there is a particular strategic interest or private capital cannot be attracted.

In closing Minister Abel said that KCH needs to regroup and refocus on the job ahead and he was confident that it has a solid foundation of sound corporate governance that would expose and address weaknesses, and identify opportunities if and when they arose.

“I have assumed the role of caretaker Minister of this important Ministry with only two months before the National Elections.”

“In that short period of time I intend to create focus and clarity, and highlight the synergy between National Planning and the three entities – Kumul Consolidated Holdings, Kumul Minerals and Kumul Petroleum.”
Sources:

http://www.thenational.com.pg/consolidation-soes-right-move-barker/

http://www.kch.com.pg/minister-clarifies-consolidation/